The FSA has stressed it remains legally bound to take into account the role of the consumer in the event of a questionable financial product sale.
It says guidelines in the Financial Services and Markets Act (FSMA) 2000 means it has to reflect on the principle of ‘caveat emptor' - meaning ‘let the buyer beware' - when dealing with the issue of liability.
However, adviser anger on the subject remains after the FSA today announced it can find no case for forcing consumers to accept more responsibility.
It had asked for industry comment on the issue amid concerns liability was imbalanced in favour of the consumer.
"We have to take into account caveat emptor under FSMA," an FSA spokesperson says. "How much we look at the role of the consumer depends on a number of things, including the product and the consumer."
Firms will continue to accept the bulk of responsibility for the sale of financial products after the FSA failed to reach a consensus on whether to force consumers to accept more liability.
The FSA asked for feedback on the issue last year but today announced that, in the "absence of wider agreement", it has decided to stick with its original guidelines.
Adviser anger is clear. Commenting on IFAonline, James Ross says: "What is wrong with the FSA? If you buy a car and find after a month that it is not as efficient as the claimed figure because you sit in traffic jams all the time, you do not sue the garage for negligent advice, you accept a degree of responsibility for your driving habits."
The Financial Services Consumer Panel (FSCP) welcomed the FSA's decision not to force consumers to accept what it calls "regulatory responsibilities".
Chairman Adam Phillips says: "The FSA's original idea was at best naïve and at worst irresponsible. The Panel has always argued the concept of ‘consumer responsibility' is flawed. We are pleased the FSA has listened to our advice."
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